In the current quarter, LIC has invested over Rs 8,000 crore in state-run banks as the government was unable to meet the capital needs of these banks. In over half a dozen banks, LIC has crossed the limit of 10% prescribed by the insurance regulator. "We have asked for information from LIC on their investments in state-run banks. We will examine the data once we get," said Irda chairman J Hari Narayan on the sidelines of a seminar by Insurance Institute of India.

LIC's investment philosophy has attracted criticism after it bailed out government's disinvestment plan by buying out Rs 12,000-crore worth of shares in Oil & Natural Gas Corp. As per the present rules, insurance companies are required not to invest more than 10% of a company's net worth.

Hari Narayan said that investment in ONGC is within the permissible limit. Irda on many occasions has reiterated its stance that LIC should follow investment regulations prescribed for life companies. But the regulator has not penalised LIC for breaching this limit in the past.

Though LIC's argument is that it invests through various funds and from each of these funds namely -- life, pension and unitlinked fund - it can invest 10%. Its life fund draws an inflow of Rs 1.5 lakh crore every year, from this it can use up to 20% for buying equity.

Unit-linked funds have an incremental income of Rs 10,000 crore and 80% of this is invested in equities. Its pension fund has an income of Rs 25,000 crore, of which 20% can be used for buying stocks. This year, the corporation has bought government securities worth Rs 80,000 crore and corporate bonds of both public and private companies worth Rs 30,000 crore.